Bellicum Pharmaceuticals Inc

NASDAQ:BLCM   2:36:06 PM EDT
2.94
-0.01 (-0.34%)
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Why Bellicum Pharma Has Enormous Upside



Bellicum Pharmaceuticals

Written by Ophir Gottlieb, 12-09-2015


PREFACE
Bellicum Pharmaceuticals is a small cap clinical stage biotech with potentially world changing treatments in the laboratory. This is a $490 million market cap firm, with $110 million in cash -- so while the risk of failure can't be ignored, this is also a company with enormous potential upside.


STORY
BLCM is in clinical trials to treat both cancer and genetic blood diseases and it has a fascinating story behind it. The firm is trying to to craft next-generation therapies that empower the immune system to battle back against cancer and other rare blood disorders. Two if its critical trials are for products with unassuming names BPX-501 and BPX-601.

On Saturday, December 5th, BLCM reported some high quality results from clinical trials. Here's what we now know:

BPX-501
BPX-501 consists of T cells taken from a stem cell donor and "modified in a lab plus a molecular safety switch to turn off the modified T cells in the event of serious graft-versus-host disease" (Source: TheStreet.com). The great marvel of BPX-501, if it works, is that it will enable donors to save children's lives: it's a bridge to allow family members to save each others' lives.


A study enrolled 39 children and all of them underwent a haploidentical, T cell-depleted stem cell transplant. That's medical speak for transplants from donors with stem cells which are not an exact match to the patient (most of them were from family members). Mismatched stem cells can cause infections and something called graft-versus-host disease (or GVHD), both of which are potentially fatal. This is where BPX-501 comes in.

Two weeks after the transplants, each of the children were infused with the trial drug and then data was compared to how these children did with how other children did that did not receive BPX-501. Here are the results:

On average, the immune system in patients treated with BPX-501 recovered 40 days faster and they were discharged from the hospital 21 days sooner than patients in the historical control.

None of the BPX-501 patients died from transplant-related causes to date compared with three deaths from transplant in the historical control.

The incidence GVHD, the most frequent and potentially deadly side effect of mismatched stem cell transplants, was also reduced by BPX-501 compared to historical controls.

So basically, in this interim trial, the treatment did quite well. The "safety switch" built into BPX-501 was never used because no severe cases of GVHD occurred. While we can all read these results, I think the most useful thing is to grab some quotes from doctors that focus on these diseases for a living, so here we go.

Dr. Franco Locatelli from Italy's IRCCS Ospedale Pediatrico Bambino Gesù said, "these interim results present strong evidence that the addition of BPX-501 modified donor T cells provides important immune support and improves outcomes in patients undergoing a T cell-depleted haploidentical stem cell transplant."

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THE OPPORTUNITY
It turns out that these haploidentical, T cell-depleted stem cell transplants are pretty rare, making up just 9% of total stem cell transplants every year -- that would be just over 2,000 of these transplants a year. As a stand alone business, this may truly be too small to matter in an economic sense. But, the potential goes much further.

A strong and thoughtful argument is being made that if BPX-501 really does work, then doctors will opt for these "mismatched" stem cell donor operations more often. That is a hypothesis founded on solid ground. But there's actually more.

Next year, Bellicum plans to meet with the FDA and European drug regulators to determine the steps necessary to seek approval for BPX-501 in transplant patients with non-malignant disease. One example the Bellicum's COO gave surrounded beta-thalassemia, a blood disorder that reduces the production of hemoglobin.

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Now, Beta thalassemia is a fairly common blood disorder worldwide. In fact, thousands of infants are born each year with the affliction according to the National Institute of Health (NIH). That expands the possible usage of BPX-501, and also puts it head to head with Bluebird Bio (BLUE), which has a gene therapy to treat the disease.

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MORE OPPORTUNITY: CANCER & CAR-T
Bellicum believes that the technology platform BPX-501 is built on can also be used to develop treatments for cancer, and now we're in a totally different league of disease, both in terms of its effects on society and its commercial viability. In fact, BPX-501 and BPX-601 may go hand in hand with CAR-T therapies. For those of you in the biotech world focusing on cancer cures, this is the game changer.

I've covered CAR-T with JUNO and KITE, but a quick review goes like this:

CAR-T therapeutics require the removal of a cancer patient's immune cells, selection and activation of the cells, and gene transfer to train the cells to attack the patient's tumor. At that point, the cells are grown in an incubator until there are enough to put back into the patient."
(Source: Fool.com).


In English, the goal is to reprograms a patient's T-cells — the kind that are supposed to fight disease — to seek and destroy only abnormal, cancerous lymph cells, not the healthy ones crucial for human life. You can see the reason for massive optimism, as this would be a cure for cancer, not a treatment.

You can read our JUNO report here: Juno is Simply on the Brink of Changing the World
You can read our KITE report here: This Biotech Just Bet the House that it Has Cured Cancer

Bellicum is working on what they call "GoCAR-T Technology" which incorporates a "switch" that activates CAR T cells when triggered. This is the promise of Bellicum on a broader, billion dollar scale. Here's an illustration from the Bellicum website that shows how the company aims to improve the standard CAR-T process:



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While JUNO and KITE battle it out to be the first to bring CAR-T to market, Bellicum stands firmly in the middle, to help either (or both) make their treatments safer and better. This is what Bellicum's website reads:

We believe these studies together provide proof-of-principle that GoCAR-T technology may turn[] CAR T cell therapy from an uncontrollable, and largely unpredictable class into a more predictable therapy which can be adjusted to the patient's therapeutic window.
(Source: Bellicum Webiste).


The product called BPX-601 is Bellicum's GoCAR-T product candidate for solid tumors. The company writes, "we are currently conducting preclinical studies for the treatment of solid tumors overexpressing the prostate stem cell antigen (PSCA) antigen. We have obtained positive proof-of-principle data in an animal pancreatic tumor model, which we believe validate BPX-601's activity and rimiducid’s ability to modulate therapeutic effect.

And perhaps the most important part:

Although many product candidates are in development for these cancers, there are currently no approved products targeting prostate stem cell antigen (PSCA). We intend to file an IND for the initial indication of pancreatic cancer by the end of 2015.

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CONCLUSION
BLCM is moving down the line with positive results for multiple treatments. While the initial glance makes its BPX-501 product look tiny, a careful eye sees a massive opportunity. Add with that the movement into CAR-T, and this is a young biotech with explosive potential.

The risk is that the company fails and that would mean it could literally go to zero. The upside is equally fantastical. The firm has a market cap of $490 million, with $110 million in cash. If it wins with either or both of its treatments, this is a multi-billion dollar firm. These are the risk and reward scenarios for this fascinating biotech.

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